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Catch-Up Options for Public School Employees

Financial Advisor Tim Hayes AIF®, CRPS®, AWMA®, CFS®, APMA®

The 403(b) 15-year retirement catch-up allows some public-school employees with 15 years of service to contribute an extra $3,000 a year for five years. One problem with this catch-up is any amounts contributed over $19,500 are credited first against the 15-year rule. So, a teacher who is age fifty or above could use up the fifteen-year catch-up without knowing it

The 457 plan has a more considerable catch-up. It allows eligible employees to contribute $37,000 a year for three years before they reach their “regular retirement date.

Your school system provides you with a list of 403(b) companies.The 457 is different. The city/town usually provides one company. Both usually give you a broad range of investment options.

You decide what plan to use and the amount that you want to save before taxes from your paycheck. In 2020, the basic limit is $19,500, and an educator age fifty or over can save an extra $6,500. The IRS, however, allows educators to contribute $19,500 to a 403(b) and a 457.*

The ability to put in the most pre-tax into two retirement plans is unique to the 403(b) and 457.



  • School systems should think about eliminating the 15-year catch-up from their 403(b) plan. Especially if there is no system in place to track if the catch-up contribution is from it or the age fifty.
  • Any employee who is saving the greatest in a 403(b) and wants to save more money can usually open up a 457 plan.
  • Remember, if eligible, you can use the 457 catch-ups with the 403(b) plus the age fifty catch-up making it an excellent option for any educator who wants to defer sick buybacks.

403b Advisor

For educators and other public employees, we review the choices available to you in your 403b or 457 plan. I recommend one or two of them, and then I build and monitor your portfolio.

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Financial Advisor Tim Hayes AIF, CRPS, AWMA, CFS, APMA


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